Méliuz, a publicly traded Brazilian company, made headlines recently with its announcement of acquiring Bitcoin equivalent to 10% of its cash holdings. The company purchased 45.72 BTC for $4.1 million at an average price of $90,296 per BTC, making it the first publicly listed Brazilian firm to hold a significant Bitcoin position as part of its treasury strategy.
Chairman and largest shareholder of Méliuz, Israel Salmen, expressed the company’s belief in Bitcoin as a long-term store of value, stating that they have no intention of selling the BTC they’ve acquired. Emphasizing their focus on building long-term value rather than trading, Salmen acknowledged the risks associated with increasing exposure to Bitcoin but highlighted Méliuz’s willingness to take calculated risks since its inception in 2011.
Salmen compared Bitcoin to traditional asset allocation strategies, arguing that holding excess capital in fixed-income instruments may result in a significant opportunity cost. He questioned the concept of risk, asking whether it is riskier to hold cash reserves subject to devaluation due to monetary expansion policies or to invest in a scarce asset like Bitcoin, which has shown significant appreciation over the past decade.
Inspired by the success of companies like MicroStrategy, which saw a significant increase in share value after adding BTC to its treasury, Méliuz decided to follow a similar strategy. The move towards Bitcoin comes at a time when investor interest in Méliuz’s stock is declining, with the company’s valuation dropping from over $1 billion in mid-2021 to nearly $47 million today.
In a letter to shareholders, Salmen acknowledged the decline in the company’s stock value and market relevance, noting the minimal analyst coverage and daily trading volume. Despite these challenges, Méliuz remains committed to its Bitcoin investment strategy, aiming to create long-term value for its shareholders.
Overall, Méliuz’s decision to allocate a portion of its cash holdings to Bitcoin reflects a growing trend among companies seeking alternative stores of value. By embracing the potential of digital assets like Bitcoin, Méliuz is positioning itself for long-term growth and resilience in an ever-changing financial landscape.